Art-tile operates in a market where there are a number of competitors and anyone could set up at operation like Art-tile by making the same initial financial commitment as Art. QM is the market demand for tiles and is described by the following demand curve;TilesWorkersAVCATCMCTCRevenue1000108208220009000200019813.67.25000018000300027711.26.4930002700040003479.85.614800036000500041795.62170004500060004868.45.63000005400070005878.384180006300080007078.59.657200072000 P = 40 - .0001QM What is the long run equilibrium price for the type of tiles that Art-tile produces? Why? How many companies will produce this type of tile in long run equilibrium?

Tiles Workers AVC ATC MC TC Revenue 1000 10 8 20 8 22000 9000 2000 19 8 13.6 7.2 50000 18000…

Answered: What is the long run equilibrium price…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Art-tile operates in a market where there are a number of competitors and anyone could set up at operation like Art-tile by making the same initial financial commitment as Art. Q_M is the market demand for tiles and is described by the following demand curve;

Tiles	Workers	AVC	ATC	MC	TC	Revenue
1000	10	8	20	8	22000	9000
2000	19	8	13.6	7.2	50000	18000
3000	27	7	11.2	6.4	93000	27000
4000	34	7	9.8	5.6	148000	36000
5000	41	7	9	5.6	217000	45000
6000	48	6	8.4	5.6	300000	54000
7000	58	7	8.3	8	418000	63000
8000	70	7	8.5	9.6	572000	72000

P = 40 - .0001Q_M

What is the long run equilibrium price for the type of tiles that Art-tile produces? Why?

How many companies will produce this type of tile in long run equilibrium?

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